To make an inventory adjustment

Type the quantity by which you want to increase or decrease the quantity held. Only enter the quantity variation. Type the quantity in inventory units, not buying or selling units. If you enter a positive number, that number is added to your on-hand inventory. If you enter a negative number, that number is subtracted from your on-hand inventory.

C

The unit cost of the item appears by default. The unit cost is calculated as the total cost of the item divided by the number of units on hand. If these are new items, enter their purchase cost.

D

The Amount field displays the quantity multiplied by the unit cost. If you change it, the unit cost is recalculated automatically.

E

Enter the account you want to assign the adjustment amount to. If you’re reducing the inventory value, this account is usually a cost of sales or expense account.

F

Select whether you want this adjustment to be allocated as an end-of-year adjustment. End-of-year adjustments can be excluded from your financial reports.

Examples of inventory adjustments

This inventory adjustment increases the number of items on hand by two and the total value of the items on hand by $700.

Example 1b

This inventory adjustment increases the number of items on hand by two but does not change the total value of the items. The average cost of the items will decrease as result of this adjustment.

Example 2

This inventory adjustment increases the total value of the items on hand by $120 but does not change the number of items on hand. The average cost of the items will increase as a result of this adjustment.